At Hostess, Everything's for Sale but the Kitchen Sink

Toward the end of the spirited bankruptcy hearing that led to Hostess Brands' liquidation, a quiet voice conferenced into the White Plains, N.Y., courtroom piped up. It was a lawyer representing Blommer's chocolate, which coats famous snacks like Ding Dongs and Donettes.

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Hostess Twinkies

With the bankruptcy judge near ruling that Hostess could sell everything to the highest bidder, she had a plea: that Blommer's could buy back its chocolate before Hostess sold it to a third party. (Judge Robert Drain said Blommer's could buy it back, if it paid the most.)

A harsh reality for a name like Hostess, whose products like Twinkies, Wonder Bread and Ho Ho's (also covered by Blommer's chocolate) have become ingrained in American memory. A swelling debt load and a protracted battle with a key union forced Hostess, unable to produce its iconic snack products, to liquidate.

While court proceedings over executive payments and bankruptcy nuances continue Thursday, it will be weeks before Hostess will see initial, court-approved bids settled for its various businesses. (Read More: How Hostess Failed: Hedge Funds vs. Unions.)

Hostess advisers are hoping, in that time, they can capitalize on the cultural attachment to the brand, if not the financial health. Josh Scherer, the banker at Perella Weinberg Partners leading the auctions of Hostess brands, told the courtroom he believed he could fetch over $1 billion dollars for the businesses—roughly half of their aggregate $2.4 billion in revenues.

"I'm holding him to that," Hostess chairman and CEO Greg Rayburn said of Scherer's claim.

Many consumers hope that a buyer will emerge for the iconic Twinkies. While a small percentage of the overall pie, Twinkies produce $100 million in revenues for the company—so that price tag could chip away at Hostess's debt to creditors. (Read More: No More Twinkies? It. Can't. Happen. In. America.)

Among the parties interested in parts of Hostess: Mexico's Grupo Bimbo, which could look to purchase some of the snack cakes businesses, Southeastern bakery company Flowers Foods, or private equity firms like Sun Capital.

The Irving, Texas-based company employed 18,500 people and operated more than 500 retail bakeries, featuring the dozens of Hostess products popular in school lunches. In liquidating, Hostess eliminated 15,000 jobs and kept the remaining onboard to help wind down the company.

Still, Scherer was hopeful some jobs would be kept. During the hearing, he recalled the visit of a potential buyer to the Drake's Cakes plant in Wayne, N.J., where roughly 200 people worked. The buyer, which remained unnamed, had one big concern: making sure he had enough people to run the place.

"We're going to sell everything we can, and as quickly as possible," Rayburn said of the company's plants, trucks, formulas—and chocolate.